The Dow’s road to the record

Charting the blue chips’ resurgence

FactSetThe Dow’s return to record territory after more than five years of financial turmoil around the globe marks a milestone for the financial industry — and for investors. It’s also a testament to the persistent efforts of the Federal Reserve to kick-start a reluctant economy in hopes that rekindling the “wealth effect” would help overcome consumer fears and a deeply fractured political structure in Washington. Here we take a look at the leaders and laggards along the Dow’s road back.

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FactSetIBM has been the undisputed king of the Dow’s comeback. That’s thanks in no small part to the Dow’s calculus, which is price-weighted, giving the greatest influence in the index to the most expensive stock. That same price-weighted construct all but guarantees that stocks such as Apple, Google and Berkshire Hathaway will never be components of the index, since they would overwhelm the other components.

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Leader of the pack: International Business Machines

FactSetHewlett-Packard, a Silicon Valley icon, is at the bottom of the heap of Dow stocks that were in the index when it last traded at these levels. The embattled PC maker has seen its stock drop sharply in the intervening years as a succession of CEOs tried and failed to turn around its business.

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The dog of the Dow: Hewlett-Packard

FactSetBank of America joined the Dow partway through the financial crisis as a beleaguered financial-services industry retained representation in the index after AIG’s implosion. Not surprisingly, B. of A. has traveled a rough road since, though it has participated in the latest run.

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Beleaguered financial: Bank of America

FactSetVolatility as measured by the so-called fear index peaked during the financial crisis in the fall of 2008, when triple-digit daily moves became commonplace for the Dow . In more recent years, volatility has put in lower highs and generally trended downward as the reverberations of the crisis have settled down.

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Fearful spasms: The CBOE volatility index

FactSetThe Nasdaq Composite Index has rebounded sharply as well, but its returns have been muted this year by the dismal performance of Apple, whose slide has weighed heavily. A record close for the tech-heavy index doesn’t appear to be in the immediate future.

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The bridesmaid: Nasdaq Composite

FactSetJust three stocks in the Dow Industrials fell Tuesday, as the index made its final push into record territory. Coca-Cola , Merck nd Alcoa ended the day in the red, while Cisco , United Technologies and Boeing led the gainers. Nine stocks in the 30-component index set 52-week highs Tuesday.

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